The Role Of Luck

tumblingdice

by Steven Sarnoff

When people find out what I do for a living, they invariably ask what I think the market is going to do.  I politely tell them that if I knew what the market was going to do, I wouldn’t have to work.  If you ever encounter someone who claims to know what the market is going to do, zip your wallet.

In option trading and in life, luck plays a featured role.  We are practitioners of uncertainty. Somewhere back in the mid-1990’s I recall seeing Alec Baldwin interviewed on the show, Inside the Actor’s Studio. He was asked to describe what acting was like to him.  Baldwin answered that it was like repeatedly banging your head against a door and then, it’s all up to luck.

Upon hearing that, I sat bolt upright and thought, “Yes, that is what I do!”

We all know examples of being in the right place at the right time and at the wrong time — and being in the wrong place at the right time and wrong time.  But for chance and the smallest and seemingly inconsequential action, life-changing events occur — both good and bad.

From a serendipitous encounter, you meet the love of your life.  What combination of events brought you to that place, at that moment in time?  A cyclist peddling happily along in a protected bicycle path is suddenly struck and killed by an out of control car careening up from the Ted Williams parkway.  What are the probabilities of that?

So it is with markets.  You can do the most thorough, insightful analysis.  But each day, anything can happen.  Don’t tell the market what to do.  Listen to what the movement of the market price is telling you to do.  As you develop your complete game plan for trading success, check your ego at the door and be set for whatever the market throws at you.  I wasn’t a Boy Scout but I believe in their motto, “Be prepared.”

So with the new trading week underway, approach the markets ready for anything. That’s the way we take each day at Options Hotline and have been doing so since 1989.  Click here to subscribe today.

I wish you good luck in your trading.

Best regards,

Steve

P.S. I’m headed out on the road to meet up with my brother, somewhere in the middle of the west.  Back in the office next Monday, the 26th.

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